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Inter-regional interchange fees sued out of country," he said. "It is up to the acquirer to
accept or reject cards and therefore take the risk in the
The EC's second concern relates to MasterCard's "inter- transaction."
regional interchange fees" that acquiring banks pay for
transactions that occur outside of their respective mem- MasterCard's response
ber states. For example, a European acquiring bank can
pay up to five times its normal interchange rate "when a MasterCard acknowledged receipt of the EC's SO "in
Chinese tourist uses his card to pay his restaurant bill in relation to payments made by cardholders from non EEA
Brussels" compared to transactions on European-issued countries and with respect to MasterCard's rules on cross-
payment cards. border acquiring within the EEA." And the company is
preparing a written response to the anti-trust proceedings.
Millions of euros are spent each year on inter-regional
fees. The EC is concerned that the high costs of these inter- "We will be formally responding to the SO and are also
regional fees could be passed to banks, retailers and "all working with the European Commission on the issue as
consumers," including those who use European-issued part of an ongoing constructive dialogue," the company
cards outside of the European Union. stated, adding that it will continue to prioritize the
needs of both consumers and merchants throughout the
Brion Bonkowski, Managing Director of New York-based procedure. MasterCard said it also continues to encourage
ROIPayments, said that MasterCard's interchange fees electronic payment acceptance both inside and outside of
vary by member state in the EU because acquiring banks the EU.
have different risk and cost structures associated with
chargebacks and fraud, depending on where they are lo- MasterCard's counsel is reviewing documents in the
cated. EC's investigation file, and the company may request an
oral hearing to defend its position. After the hearing, the
"The reason inter-regional interchange fees are higher is EC will make a final decision and determine a course of
because there is a higher likelihood of fraud on a card is- action.
Inter-regional interchange fees sued out of country," he said. "It is up to the acquirer to
accept or reject cards and therefore take the risk in the
The EC's second concern relates to MasterCard's "inter- transaction."
regional interchange fees" that acquiring banks pay for
transactions that occur outside of their respective mem- MasterCard's response
ber states. For example, a European acquiring bank can
pay up to five times its normal interchange rate "when a MasterCard acknowledged receipt of the EC's SO "in
Chinese tourist uses his card to pay his restaurant bill in relation to payments made by cardholders from non EEA
Brussels" compared to transactions on European-issued countries and with respect to MasterCard's rules on cross-
payment cards. border acquiring within the EEA." And the company is
preparing a written response to the anti-trust proceedings.
Millions of euros are spent each year on inter-regional
fees. The EC is concerned that the high costs of these inter- "We will be formally responding to the SO and are also
regional fees could be passed to banks, retailers and "all working with the European Commission on the issue as
consumers," including those who use European-issued part of an ongoing constructive dialogue," the company
cards outside of the European Union. stated, adding that it will continue to prioritize the
needs of both consumers and merchants throughout the
Brion Bonkowski, Managing Director of New York-based procedure. MasterCard said it also continues to encourage
ROIPayments, said that MasterCard's interchange fees electronic payment acceptance both inside and outside of
vary by member state in the EU because acquiring banks the EU.
have different risk and cost structures associated with
chargebacks and fraud, depending on where they are lo- MasterCard's counsel is reviewing documents in the
cated. EC's investigation file, and the company may request an
oral hearing to defend its position. After the hearing, the
"The reason inter-regional interchange fees are higher is EC will make a final decision and determine a course of
because there is a higher likelihood of fraud on a card is- action.
